Pretax profits for Japanese companies reached an all-time high of 35.77 trillion yen ($244 billion) in the April-June quarter, with capital expenditures increasing by 7.4 percent compared to the previous year, according to government data released on Monday. This uptick reflects a strengthening corporate environment amid an ongoing economic recovery.
Pretax profits rose by 13.2 percent, marking the sixth consecutive quarter of growth, driven by strong overseas sales, a depreciated yen that enhances profits for exporters upon repatriation, and a notable rise in foreign tourist arrivals to Japan.
As reported by Japan’s News Agency (Kyodo), total investment across all non-financial sectors for activities such as factory construction and equipment upgrades reached 11.92 trillion yen. This figure represents the second-highest amount for the April-June period and the 13th straight quarter of growth, according to the Japanese Finance Ministry.
Sales saw a 3.5 percent increase, totaling 368.96 trillion yen—setting a record for the April-June quarter—driven by higher food sales as companies passed increased costs onto consumers. These results will inform the revision of the country’s gross domestic product for the second quarter of 2024, which experienced growth for the first time in two quarters. The Cabinet Office is set to release its update on September 9.
Read more: China’s industrial companies achieve $575.1 billion in profits in first seven months
Moreover, capital expenditures serve as a crucial indicator of GDP performance. Investment from manufacturers rose by 1.4 percent, primarily due to advancements in information communication and electronics machinery, while non-manufacturers, particularly service providers and electric utilities, led the way with a 10.9 percent increase in spending.
For more economy news, click here.
